n a real interest rate of 5% and expects the inflation rate to be 3% over the period of the loan, what nominal interest rate should the lender charge?…

If a lender wishes to earn a real interest rate of 5% and expects the inflation rate to be 3% over the period of the loan, what nominal interest rate should the lender charge?

Question:If a lender wishes to earn a real interest rate of 5% and expects the inflation rate to be 3% over the period of the loan, what nominal interest rate should the lender charge?Solution:…